rhode island state house under cloudy skies
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PROVIDENCE, R.I. (AP) — A $13.6 billion state budget passed the Rhode Island House late Thursday, sending it to the Senate for a vote.

The House version of the budget for the 2023 fiscal year accelerates phasing out the car tax, eliminating what would have been the final year of the tax next year at a cost of $64 million. That means nearly all residents would not receive another automobile excise bill. East Providence operates on a different fiscal year than most municipalities.

It has a one-time child tax credit of $250 per child for up to three children per family.

House leaders said they wanted to provide targeted taxpayer relief and direct how to spend the rest of the American Rescue Act Plan federal funding on one-time investments to address longstanding problems, rather than recurring costs. The state received $1.1 billion in federal pandemic relief funding.

“Rhode Island has been making a very strong economic comeback since the worst days of the pandemic, and with a boost from the federal resources we’ve received over the last couple of years, we’re going to be able to help Rhode Islanders from all walks of life through this budget,” Democratic House Speaker Joe Shekarchi said in a statement. “A budget is really much more than hundreds of pages of revenue and expenditures. It’s how we act on our priorities and values.”

Shekarchi said it’s a “responsible budget” that prioritizes adding affordable housing, helping residents who are “feeling the pinch of inflation,” boosting funding for health care, mental health and social services and strengthening schools.

The budget eliminates an $8 fee that was going to be charged for registration renewals and added $4 million to increase a tax credit program for seniors and people with disabilities. It eliminates the income tax on military pensions to help veterans and raises the amount of annual pension income that is exempt from state taxation from $15,000 to $20,000 for other retirees.

It dedicates $100 million to the unemployment trust fund to reduce businesses’ unemployment tax rates for 2023, and it allocates about $62 million to the state pension system to pay off the liability remaining from when the state’s contributions to the fund were deferred in the 1990s.

The budget plan commits to nearly doubling the number of voluntary, free pre-kindergarten seats to 5,000 statewide over five years. It includes nearly $170 million to upgrade the state psychiatric hospital.

The largest share of the federal pandemic relief funding, $250 million, was allocated for housing initiatives, including building new units of affordable housing, and $190 million was set aside for paying for future costs to respond to the pandemic.

The budget plan includes three bond questions for the November ballot, including a school construction bond.

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